Bitcoin spot ETF issuers are actively addressing the SEC’s concerns about Bitcoin ETFs. Multiple issuer executives revealed that they have been paying attention to the SEC’s feedback and expressed concern about companies such as Grayscale adopting SEC-sanctioned creation and redemption models. This resulted in the publisher agreeing to disclose authorized participants, in what was considered an unusual move. At the same time, concerns related to the hard fork have also been addressed.
In some ETF structures, the fund uses an in-kind redemption model that allows investors to exchange shares for underlying securities or commodities to avoid tax penalties. In meetings with the SEC, Grayscale had advocated for providing physical and cash creation and redemption models, but ultimately accepted the SEC’s cash model requirements. Other companies such as BlackRock have also indicated a preference for a cash model.
Sources revealed that Grayscale pushed for physical redemption at the meeting before Christmas, but ultimately compromised on the SEC's requirements. Recently, companies hoping to list Bitcoin ETFs have announced authorized participants, including major banks such as Jane Street Capital, JP Morgan Securities LLC, and Valkyrie. This is considered a matter promoted by the SEC and is relevant to its focus of ongoing dialogue.
Additionally, progress has been made in dealing with issues such as hard forks and airdrops. (The Block)